The business behind the show

Anticipating backlash, Comcast goes on the offensive in D.C.

December 3, 2009 | 3:28
am

Anticipating a big backlash from media watchdogs, competitors and regulators worried about its takeover of General Electric Co.'s NBC Universal, Comcast Corp. sent a five-page letter to key lawmakers this morning looking to ease concerns about the nation's largest cable and broadband company owning a Hollywood powerhouse. (For details on the $30-billion deal, please see our story here.)

With assets ranging from cable systems reaching almost 25 million homes and 26 television stations and broadcast and cable networks including NBC, MSNBC, USA and Bravo, a Comcast-NBC combination will have a lot of clout in the marketplace when it comes to content and distribution. Even Comcast acknowledges that after the deal closes it will control one out of every seven channels in the typical household.

The hyperbole around the deal has been growing in volume over the last month. Jeff Chester, who heads The Center for Digital Democracy, has said Comcast controlling NBC Universal is like "Godzilla swallowing Rockefeller Plaza." Andrew Schwartzman, president of Media Access Project, a public policy law firm, said the combination of Comcast-NBC is "the most important media merger since Lucy met Desi" and added that "no entity should have control over such a large audience."

There are no major regulatory hurdles that could impede the deal but getting it through a maze of regulators and lawmakers could take as long as 18 months. "There is no bright-line law forbidding Comcast and NBC from joining
... moreover, vertical mergers are less troublesome to government
regulators and antitrust officials than horizontal mergers," said the
Washington consulting firm MGA.

But that doesn't mean lawmakers and regulators won't review every aspect of the marriage with a magnifying glass. Before being elected, President Obama expressed concern about media
consolidation, and when Federal Communications Commission Chairman
Julius Genachowski was confirmed by the Senate earlier this year, he
too said, "Excessive consolidation is still something I think needs to be paid attention to." Besides the FCC, either the Federal Trade
Commission or the Justice Department will weigh in, as will Congress.
The first stop for Comcast CEO Brian Roberts will likely be the Senate
Judiciary Committee's antitrust subcommittee, which could hold hearings
on the deal before the end of the month.

There will likely be conditions put on Comcast before the merger can be given a seal of approval, most likely regarding how Comcast sells its programming to rival distributors such as satellite broadcaster DirecTV and Verizon's Fios television service.

In its letter to policymakers, Comcast made several commitments it hopes will assuage Capitol Hill. Among the highlights: Comcast will not turn NBC into a cable network, nor will it interfere with news coverage by the network or its cable channels CNBC and MSNBC. It promised to put more children's programming on NBC's television stations and increase local news programming. It also promised that it would bargain in good faith with rival distributors wanting to carry content owned by Comcast. The company also said it would honor all of NBC's current union deals.

With a Washington team of almost two dozen staffers internally and some of D.C.'s biggest law firms and lobbyists on retainer, it's not as if Comcast doesn't know the regulatory landscape or the current political climate. It has been aware for months that such a huge merger would face intense scrutiny. It is unlikely that its commitments to fair play and the public interest will sway the advocacy groups that will line up to protest any merger.